Question for the Money Doctors

Question submitted on Nov 13, 2012.

Question

I have a sears mastercard and i used it for one transaction and nothing else. Now after almost two years of having the account with no transactions i notice a 2500 transaction. i inquire the customer service and they inform me they cannot get rid of the transaction because it belongs to a collection agency. I do not know what to do. I thought i had rights that would insure that if i had not authorized a transaction i had no monetary obligation! i dont feel their customer service gave me correct information so i am seeking help here. how can i handle this situation? what are my rights?

Answer

The Sears debt has most likely been purchased by the debt collector, which now forces you to deal directly with the collection agency. Have you received any notice from a debt collector? The Fair Debt Collection Act provides you with a 30-day window in which to contact the collector, by means of a letter, to inform the agency you are disputing the debt. The collector is required to cease activity until the debt can be verified by the initial creditor (in this case, Sears). Sears will have to provide a receipt or bill or some other proof of your liability.

If it has been beyond 30 days since you were notified, it is still a good idea to dispute the debt, in writing, with the collection agency. However, the collector does not have to verify the debt, nor does it have to stop its collection process. If you have not received written notice from the debt collector, the 30-day timeframe does not apply and you can request verification of the debt from the agency. In all cases, it is a good idea to document the details of any phone calls and keep copies of all correspondence, receipts, and other evidence for your case.